آیا اندازه بازار خانه برای الگوی تجارت اهمیت دارد؟

Does home market size matter for the pattern of trade? Krugman started the literature, showing it does matter. Davis overturned his result, arguing that an assumption of convenience—transport costs only for the differentiated goods—conveniently obtained the result. Here we relax another persistent assumption of convenience—two industry types differentiated only by the degree of scale economies—and find that market size reemerges as a relevant force in determining industrial structure.

A famous result due to Krugman (1980) is that increasing-returns industries will tend to concentrate production within large markets.1 If a large country begins to trade with a small country, the large country will shift its industrial structure towards the production of increasing-return-type goods and export these to the small country. The small country, in turn, will shift its structure towards constant-return-type goods and export these to the large country. For example, if trade barriers are reduced between a small country such as New Zealand and a large country such as Japan, New Zealand will shift away from a scale-economy industry such as autos towards a constant-returns sector such as wool. Krugman's result is important, because the success of an economy is thought to be related, in part, to its industrial mix; New Zealand is unlikely to be rich completely specializing in wool.

Our analysis assumes that the structure of demand is the same across products and allows the degree of scale economies to vary across products. It is straightforward to see that analogous results would be obtained if the cost structure were the same across products but demand structure were to differ. In particular, suppose that consumers have relatively greater demand for some products relative to others in the sense that they would choose to buy a larger quantity at the same price. For goods with a high enough level of demand, it might be possible for firms to get to the constant-returns-to-scale region even in the small country, so these goods would not be traded, analogous to the way there is autarky in our original model for the goods with low minimum efficient scale. Following the same logic as in our original model, the small country will tend to export goods of intermediate level of demand and import goods with low levels of demand. One can think of the products with low level of demand as “boutique” or “niche” items. Only the large market can sustain production of these “unusual” items.7